Post offices - securing their future - Business and Enterprise Committee Contents


Memorandum submitted by Torbay Council

INTRODUCTION

  Our response to the Business and Enterprise Committee enquiry reflects the fact that Torbay Council has become very aware of community feelings and of the huge importance of post offices to them during the Post Office Network Change Programme that came to Devon in February 2008 and in which we have taken a very active role.

  Our involvement included supporting local campaigns to keep individual post offices open within Torbay and working with the other Devon Councils (County and ten districts) to ensure the proposals and the strength of feeling across the whole county formed a part of our response to and negotiations with Post Office Ltd (POL).

  We are very happy to work with the Committee on any further issues they might wish to explore and to host a site visit to aid their work.

1.   What services should the Post Office offer,

from government

  The full range of government services has diminished over the years including the loss of the giro cheque and TV licensing. Through the post office card account, people can access many of their state benefits and this supports sound financial management for people on low incomes as they can pay utilities bills at the same outlet and at the same time.

  In Torbay over 36% of residents do not have access to a home computer to effect on line transactions and up to 60% choose to use post offices for DVLA car licensing rather than on line renewals.

  We believe that the full range of services should be offered to post offices so that residents have the choice enabling them to have a life style that improves financial well being.

  In the current economic climate and in the longer term it is essential to encourage people to save via National Savings and Investments and to pay their bills once they access benefits and post offices have a pivotal role to play in furthering this through the range of services including TV licensing. To bring services to local people at the access points they want will also have a positive effect in reducing crime and disorder. We should be aware that post offices not only serve neighbouring residents and businesses but that many individuals travel to work and use post offices near their places of employment.

  We also understand that POL negotiates contracts with government agencies without consultation with post masters and this produces a position where some post offices offer some services such as car licensing and others are unable to. This is confusing for customers and so we also recommend that all post offices should be able to operate on a level playing field and have the opportunity to offer all services in a facility that is fit for the twenty first century.

from local authorities

  Torbay Council is exploring partnership working with post offices with reference to the pilot schemes in Camden, Lambeth and Sedgemoor where post offices are commissioned to deliver consultation exercises, meet Housing benefit intervention targets and inform and communicate to residents. The pilots show a much higher rate of return for consultation and Benefits communications and the councils and post offices involved both conclude that people are more comfortable in giving information to and dealing with post offices rather than with local authorities. The benefits are that councils can meet their targets more easily and footfall is increased in the post offices that often have retail outlets so everybody benefits,

  This is in line with the desire of the South Devon federation of sub post masters who would rather have viable businesses than the Essex or Devon County models where direct support grants are made. It is clear that no one size fits all and the needs of one particular community or neighbourhood will not reflect all of them.

  At present, Torbay Council barcodes its Council Tax and Business Rates bills so that they can be paid at any post office at no cost to the payee and is developing the facility for all bills and penalty charge notices to be paid in this way.

  We are looking to explore a pilot on a wider basis with a selection of post offices such as information portals, delivery of some services and outreach facilities such as reporting changes.

  As well as supporting residents and visitors, Councils also need to support small businesses so we believe that in the interests of social cohesion and developing stronger communities all options should be explored. In this way the council can achieve required efficiencies in service delivery by making use of a network already in place as well as supporting post offices.

from other sources, including services in competition with Royal Mail Group

  There is a requirement from POL that post offices do not engage in trade or services that compete with their own. An example of this is that in working with the Community banking service and credit union in Torbay, we wished to employ post offices as collection points for savings, or loan repayments and pay outs as they are very convenient for our customers. Post masters were in principal, willing to take this up but POL will not allow it because it is in competition with services they offer.

  We believe, having gathered the views of post masters locally that the shackles should be taken off and post offices should be allowed to compete in the open market without the loss of any goodwill in their relationship with Royal Mail Group.

  Post masters would especially like to undertake more business banking by dealing with business cheques and extending the range of partner banks and we have evidence from supporting our community campaigns that small businesses find post offices more convenient to use because of their proximity, availability, parking and opening hours rather than the banks that often mean closing the business to deal with.

2.   How much account should be taken of?

 (a)   costs to the taxpayer in providing services through the Post Office rather than through cheaper channels; and

  Putting any cost to the tax payer in context, current government thinking has incurred huge costs in baling out the banking system and citizens are seeing only limited benefit from this. Citizens do receive real and personal benefits from their post offices which are often the focal point of communities and Torbay Council believes that we cannot afford the social cost of losing the post office network.

Hazel Blears paper "Communities in Control" 2008 endorses strengthening communities by ensuring they meet the needs of the residents and post offices can play a pivotal role in both rural and urban areas especially where other local shops or meeting places such as public houses have closed.

 (b)   consumer preference for alternative channels?

  Consumers like choice in how they conduct their business and although a percentage prefers to use on line or self service transactions, many prefer to go to the post office. Torbay has very high numbers of older people and this is set to increase and a trip to the post office represents some social intercourse, means more active pensioners and provides some social support in what can be a confusing modern world.

  Many of our small businesses use post offices for banking, mail order & parcel dispatch and it also gives them the opportunity to raise awareness of local issues.

  Residents with learning disabilities or those with dyslexia are able to conduct their business with support from post masters giving them a degree of independence when they could not manage self service or on line transactions.

  We believe it is government departments rather than consumers who have a preference for alternative channels

3.   To what extent would the desire for the presence of a Post Office or Post Office services translate into actual use of those services?

  Evidence in Torbay suggests that with the media awareness of the threat of losing post offices and the campaigns to keep them, transactions have increased significantly in the two that were saved.

  If all post offices could offer all services, this would increase further. There is huge public confidence in the post office and many citizens have transferred their savings and banking to them as a result of the current loss of trust in the banks.

4.   What are the impacts of the availability of post office facilities for businesses and local residents; and in particular how significant is the network in aiding social and financial inclusion?

  Any further loss of the network would have a profound effect on residents and businesses. For example, the main post office in Torquay has recently been integrated into a branch of W H Smith. There is no parking within half a mile and it is located in a pedestrian precinct which limits access. Based on the first floor, the lift will not accommodate a wheel chair further limiting its use. People rely heavily on their sub post offices.

  The network is extremely significant in aiding social and financial inclusion for the following reasons:

    — Public confidence.

    — Support to aid those challenged by learning disabilities, those for whom English is not a first language or older people to conduct their business independently.

    — Sound financial management for people on low incomes who can access their state benefits and pay their bills at one point or in one transaction leaving less chance of incurring debts.

    — A local focal point in the community where people can meet each other and find out about issues that affect them.

    — An unofficial alert system that post masters operate for customers who have not been seen when expected to be. With large numbers living alone, this is very important for health and well being.

    — Access and parking for the physically disabled.

  Anecdotally, one of our sub post offices that was threatened with closure is in a street of mixed retail shops plus a doctor's surgery and has a high older population. It is common for hundreds of people to make a day out of their trip to the post office—getting their pension, doing their shopping, visiting the hair dresser or chiropodist, aligning their GP appointment and having coffee or lunch in the caf

.

  Closure of such a branch would have a detrimental effect on all of these businesses.

  A further important facet to consider is the green agenda. With local post office branches, many citizens are less likely to need their cars to do their business and can walk or use public transport to do their business, contributing to the desired reduction in the carbon footprint.

5.   What level of subsidy-if any—per Post Office would be reasonable in the long term; for example, should it be £20,000 or £200,000?

  We have gathered the views of sub post masters and considered schemes such as Essex Works or the Devon County support model and considered the current level of government funding to 2011 in coming to our view.

  We welcome the fact that the council supported schemes have enabled postal services to remain open in communities that would have otherwise lost them but not all councils can afford such investment and government subsidy should be available.

  We also take account of sub post masters opinions in that they would rather have POL shackles taken off without loss of goodwill to enable them to become viable commercial businesses without grant aid, fit for the twenty first century. A review of POL management arrangements is to be encouraged as central strategy often seems to be working against the network rather than for it with complex measures of success and a lack of transparency.

  As far as current government subsidy goes, the current allocation to 2011 is a drop in the ocean compared to the amounts being invested in financial institutions.

  For the future, in some cases the social cost of the loss needs to be considered especially in isolated communities and subsidies targeted towards that but in the majority of cases, we support business advice and pump priming at appropriate levels to enable the post offices to thrive independently and this could take up to £200,000 in some cases.

January 2009






 
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